TOK reports increased home lot sales 

Builders are starting to purchase developed home lots again, said Ryan Cantlon, a land brokerage specialist for Boise-based Thornton Oliver Keller Commercial Real Estate.

He said his group has completed sales of about 300 lots this year, including a 40-lot sale yesterday and a 99-lot sale a couple weeks ago, with more sales pending.

While he didn’t have exact numbers from previous years, he said it’s “a heck of a lot more” than last year, when there were only a few small transactions.

The reason for the increase, he said, is that prices have dropped.

“There’s finally been a price at which people are willing to pay,” he said, adding that properties are going back to banks and values have plummeted. “People now see that it probably makes sense to buy.”

In certain cases, lots are selling for less than replacement cost – meaning you couldn’t develop a lot for what it’s selling for today. Prices on some properties have dropped about 75 percent from their peak three years ago.

Cantlon noted that “A” projects in “A” locations are maintaining high lot values.

Buyers have been mostly local homebuilders with cash resources. Some local investors have “made moves,” he said, while some national builders and investors watch the market.

John Starr, a land specialist at Colliers International, remains skeptical about improvements in the market.

He said he talked with representatives from national builder D.R. Horton who appeared to be eyeing Treasure Valley properties. Their plans, he said, aren’t cause for any rejoicing.

“Basically what they said was, ‘We’d be really interested in buying some lots at a very low price at our terms,’” Starr said.

But such purchases would come just a few at a time, he said.

And Starr said lot prices aren’t necessarily steals right now.

“What I’m seeing is a market that continues to be destabilized,” he said. “I’m seeing similar lots in the same Ada County markets being quoted at a variety of prices depending on if you’re talking to a realtor, a banker or a developer. I continue to see product changing hands, finished lots changing hands, at a variety of prices. … I’ve talked to some people who’ve tried to keep lot prices as high as they were earlier. Whether or not they get that dollar bill is a different story.”

He added, “If you tried to tell me that lot prices have bottomed out, that builders are interested – those are a little too broadly general.”

Supply of unsold finished lots in Ada and Canyon counties stood at 13,272 in March, according to the latest numbers. That was a 96-month supply at the time.

Cantlon said he doesn’t believe the whittling down of the inventory will happen over night – a number of other factors come into play. And some developers may elect not to sell until the market improves.
“However, I believe the domino effect has been started,” he said.

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